Could there be a house price crash?

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by Kay Murchie

If house prices continue to rise, could there be a house price crash? Can house prices continue to grow?

In a recent poll released in May 2007 by This is Money, 4,100 people voted on this topic and over the next 12 months, 47% believe that property prices will drop, 41% said they would continue to increase and 12% think they will remain the same. This subject continues to be significant as the UK seems to be obsessed with property. However, is a house price crash a possibility?

According to Nationwide, Halifax, the government and Land Registry statistics, house prices cannot continue to grow and the rumour is that growth will slow to between 3% and 5% per year.

There are concerns that the interest rate will reach the 6% mark and the belief that house prices can’t keep rising is the reason that many are believing there will be a crash. However, the cost of borrowing is still attractive as 80% of new mortgages available are on fixed rates.